Car dealerships still struggling from impact of CDK cyberattack 2 weeks after hack
Most U.S. car dealerships are still struggling to sell cars, with repercussions from a cyberattack on software provider CDK Global lingering two weeks after the breach.
Hackers took down CDK's sales and client management software tools two weeks ago, crippling the auto industry in what the company called a "ransom event."
CDK has not disclosed whether or not it has paid the group behind the ransom attack, but said it has been successful in slowly restoring automated sales tools for its dealership clients.
Still, the hack has taken a sizable chunk out of June car sales — more than 5% compared with June 2023, according to an estimate from J.D. Power.
Tom Maoli, who runs a number of dealerships, including a Lexus dealership in New Jersey, said the cyberattack has slowed sales in what's usually a very busy month for him and other auto dealers.
"Right now, just on our new car sales, we're down 50% this month," Maoli told CBS senior consumer investigative correspondent Anna Werner. He has yet to calculate the full financial impact of the CDK Global outage.
Even oil changes are a challenge
Indeed, that hack has taken a toll on all of the roughly 15,000 auto dealers that rely on CDK Global software to run their service departments, process financing for car purchases, generate sales leads and manage customer relationships. For example, would-be car buyers are unable to close deals in a timely manner, as transactions that would typically take only a few hours are put on hold while systems are down.
"The DMS system that's been targeted in this attack is the backbone of an automotive dealership," Tyson Jominy, vice president of data and analytics at J.D. Power told CBS News. "It basically links together all the new vehicle, used vehicle sales, along with the finance office and even down to the service department. So consumers right now may even be having trouble getting oil changes, and getting warranty work done at a dealership.
Two customers visiting Maoli's New Jersey dealership Monday told CBS News they were able to drive off the lot with a new SUV — in about six hours. The dealership's finance and insurance manager, Tony Carlucci, processed the sale by hand and gave the couple a paper receipt.
"Since the system has been down, it's taking at least double the amount of time for us to do everything that we need to do," Carlucci told CBS News.
CDK Global said it expects all dealers' systems to be back up and running by the morning of July 4. Until then, both car buyers and sellers are advised to be patient.
Megan CerulloMegan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.
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